Motley Fool reports July 29 ….
After notching two straight days of gains, on Wednesday marijuana stocks again obeyed gravity by falling Earthward.
The catalyst was a steep quarterly net loss from Aphria (NASDAQ:APHA), which not only pulled down that stock by 17% but also peers Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC), and Curaleaf (OTC:CURL.F), down a respective 9%, 4%, and 3% in late afternoon trading.
So what
Aphria’s fourth quarter prominently featured a heavy bottom-line loss of 98.8 million Canadian dollars ($73.9 million). That’s in stark contrast to the modest profit (CA$5.7 million, or $4.3 million) it booked in in the third quarter and far worse than analysts had estimated.
Although much of it was due to what are basically accounting moves (coronavirus-related impairment charges and a revaluation of convertible debentures), it starkly illustrates the persistent difficulty marijuana companies have in simply turning a net profit.
On top of that, Aphria filed the regulatory paperwork to float up to CA$100 million ($75 million) worth of new stock. Dilutive stock issues are all too common in the marijuana business, and like those constant bottom-line losses, investors are losing patience with them.
More at https://www.fool.com/investing/2020/07/29/why-marijuana-stocks-are-plunging-today.aspx
